Jamie Matusow, Editor03.12.13
Chris Thorpe, founder, HCT Group |
Urban Decay, Laura Mercier, Clinique, Bobbi Brown, Smashbox, Nars… If you think HCT Group’s client list reads like a dropdown menu on Sephora’s website, you’d be right. The company, with offices on both sides of the “pond,” in New York City and London, as well as California, Hong Kong and Paris, and six factories around the world, does in fact provide a great deal of the packaging for all of the brands mentioned above—and many more, including industry powerhouses MAC, Estée Lauder, Revlon and Avon.
In fact, thousands of iconic cosmetic packages that HCT has created over the years surrounded us in the company’s corporate offices high above Rockefeller Center in Manhattan, where I recently joined the Group’s founder, Chris Thorpe, and Anthony DeMarco, executive vice president HCT East Coast. Some of their latest packaging innovations were spread out before us on the massive conference table. Proudly displayed on a shelf was an “Innovator of the Year” award from The Estée Lauder Companies.
Always dapper and debonair, Thorpe was attired in a traditional cashmere blazer, but sported a floral pocket square. The hint of frivolity proved to be indicative of his outlook on business—and on life.
As we began speaking, the astute businessman conceded: “I see humor everywhere. I can never see the serious side of anything.”
It’s a trait that’s served him well, taking him from “just a bloke” in London’s Chelsea district to the CEO of a global cosmetic packaging conglomerate that should achieve $250 million in sales this year, particularly when the manufacturing divisions are included.
Bored and Bred for Business
According to Thorpe, he was bored and looking for a challenge when he dropped out of high school and entered the work force. “My first decent job was working for British Petroleum Plastics,” he said. From there, he went on to run the office of Kerplas, a giant French manufacturer of plastic bottles for cosmetics and pharmaceuticals. Following a period with Laffon, he struck out on his own when Dieter Bakic sold to Tech Pak.
Thorpe launched HCT in London in 1992, and his first big break came with a packaging project for the UK’s popular pharmacy Boots.
That same year, business adventurer that he was, Thorpe went to China to seek manufacturing opportunities. At first, he joined with HCP’s Jeff Chen, but soon realized self-sufficiency was necessary. Thorpe said, “HCT started our own factories. No one owned factories back then, it was more partnerships.”
Thorpe noted the dramatic shifts that have taken place in China over the past 20 years. For example, “There were thousands of bicycles everywhere in Shanghai,” he said. “I even remember someone riding a bike with a live pig strapped to his back.”
Thorpe said he used to like Old China. “Now,” he said, “Shanghai is a super metropolis. They’ve even banned bicycles due to the incredible traffic congestion.” He pointed out the irony that at the same time, bike transportation is being encouraged in London and Manhattan.
As far as the industry in general, Thorpe said acquisitions are what have accounted for the greatest change in the beauty industry—and not a positive one in his view.
“When I started,” he said,“there were more entrepreneurial beauty companies—MAC, Kiehl’s, Laura Mercier, Urban Decay…to name a few. Now, as soon as a brand gets big, it gets sold.”
In fact, it was MAC Cosmetics that really put HCT and Thorpe on the innovative packaging map and helped them to achieve their enviable stature in the industry.
Thorpe said he personally designed the MAC line 12-13 years ago when he convinced the owners to make their products stand out by changing the packaging.
In 1998, he went to the two owners of MAC. “At that point they had already sold half of it to Lauder,” he said. “I told them, ‘You need to have something different, not generic packaging in black. Your quantities are such that you can afford some tooling costs.’ ”
Thorpe then redesigned all of the brand’s packaging, making it more of a gunmetal color. “That put me on the map,” said Thorpe. “I designed the hottest line there was.”
Today, HCT does nearly all the brand’s base products, and Thorpe noted proudly: “MAC is on a continuous rise.”
Advantages of Remaining Entrepreneurial
Just as with the loss of autonomy and the rise of bureaucracy that occurs when cosmetics groups get bought up, the same holds true of manufacturing groups, said Thorpe. “I see a concentration and polarization of large companies that are purchased by investment groups. It’s not good for the industry; it cuts down on the choices available.”
But Thorpe also believes that all of the manufacturing buyouts enable HCT to maintain its edge as a company highly regarded for its innovation, which stems from its ability to make all of its own decisions and focus on being creative. As a result, brands are strongly attracted to the company’s freethinking design methods. “We’re always dealing with a diverse concentration of customers,” he said.
“We serve the largest lines of color cosmetics out there,” continued Thorpe. “We’re known for our innovation.And no matter how large we get, we’re unique in that we remain entrepreneurial.”
He added: “We try to expand our business through creativity, quality and production speed.”
Onward and Upward
As HCT developed over the years, Thorpe realized the need for increased manufacturing facilities. Today, the company, now known as HCT Group, owns six plants: two for plastic injection molding in China; one for metal manufacturing where they do zamac and one for electroplating; one brush company; and one filling company. HCT recently signed an agreement with an injection-molding factory in northern Mexico.The Group now also has a division dedicated to point of sale and a Korean partner for airless pumps and packages.
As a group, Thorpe emphasized that HCT is truly a one-stop shop for the cosmetics industry. “We serve the customer 360 degrees—from concept to finished product,” he said. The company has expanded its filling services, so it’s now a completely full service operation.
The Group’s back office support structure enables them to come up with a concept, do a drawing, and show customers SLA prototypes in a matter of hours.
HCT owns offices in the U.S.—in New York, New Jersey and California—as well as in London, Paris, Madrid and Hong Kong. Thorpe said the company follows a different business model in each one—but the core model is plastic cosmetic packaging.
Worldwide, HCT employs about 170 packaging people. Including factory workers, that number extends to around 3,000.
With “three centers of innovation”—New York City, California and London—HCT has a strong commitment and investment in designers, with each center employing both full time and freelance talent.
Thorpe said that the London office “has developed a lot of business in Spain, mostly full service. Large stores there prefer HCT’s business model.”
As far as California, Thorpe said, “We have been unbelievably successful there.”
The reason: “Smaller, entrepreneurial firms with limited bureaucracy and a willingness to take considerable risk,” said Thorpe.
I couldn’t help but ask him: How do you manage worldwide growth like that?
He told me it’s all about the people. “The entrepreneurial spirit contributes to a work environment that attracts top talent,” said Thorpe, adding, “No one really leaves us.”
He acknowledged DeMarco, seated to his right, saying: “Anthony is my right hand man—he successfully developed the East Coast business.”
The thriving West Coast business he attributes to his son, North American president Tim Thorpe, and to Nick Gardner.
Aside from talented employees, what makes HCT so successful? Where do they get their innovation?
Thorpe’s own attitude obviously trickles down. “Eagerness leads to innovation,” he said.“It’s not a job—it’s part of who we are; knowing who our customers are; knowing the marketplace.”
DeMarco said that Thorpe’s passion is never-ending—and it’s contagious. “When someone asks Chris to go for a beer after work—he’d rather go to Sephora or to the cosmetics counters at Saks or Bendel’s.”
And he said he has learned so much from Chris on their trips to counters. “Chris nurtures our staff through his passion,” said DeMarco. “We’re all passionate about what we do.”
And they don’t just stop at visiting department stores, as ideas can come from anywhere. For example, Thorpe said a compact with a spring-loaded mirror that pops out from the side was a brainchild of Tim’s after he noticed a spring-loaded product at a Sharper Image store.
Do they present the ideas to their clients? Or do the brands approach them? Thorpe said: “We let the marketing people come to us, as they see themselves as the entrepreneurs of the brand along with Package Development and Purchasing—it’s a team effort.”
What are the challenges of today’s market? Thorpe said, “Innovation is the most important thing for companies. But it’s an oxymoron—they want it but don’t want to pay for it.” He also said that utility patents are more enforceable than design patents, but both are important to HCT. “We have not copied anyone,” he added. “We have never been a me-too company.”
Future Designs
With all this under their belt, what’s next for the 360-degree group?
“I don’t know where we’ll go from here,” said Thorpe, half-jokingly, “other than have a carton company.” He said they’re also considering the viability of building a factory in North America.
Looking back through the years, Thorpe lamented, “There is no longer the bond between customer and supplier that there should be,” and observed that “the ‘old guard’ is going from the industry and we’re looking for the new guard to emerge.”
Ultimately, Thorpe exudes the obvious, saying, “I enjoy what I do. I believe in systems—systems for the delivery of creams and powders.” He said proudly: “We’ve inspired most of the cosmetics packaging there is.”
Thorpe claims to now be semi-retired and handing over the reins to his son, Tim. While he said, “I have separated myself from day to day work with customers,” his passion for the industry and his pride in HCT have clearly not abated.
“The company was built on quality and service,” he said. “I have never had anyone complain about either.”
We then wrapped up our talk because he was off to a dinner engagement, but I had the feeling that he’d work in a visit to a midtown department store cosmetics counter en route to the restaurant.